Chapter 1- We The People
The US Constitution
The Main Objective was
To Distribute Power Broadly to Citizens & Member States
To Protect the Individual from the Powers of the State
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These rules of governance turned out to be the perfect formula for economic growth and prosperity.
The same rules apply to individual corporations as well as nations.
Thoughts by George White
The preamble: "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the Blessings of Liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America." full text: http://www.usconstitution.net/const.html
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We hardly think of the Constitution of United States of America as an economic document, but it's possibly the most powerful blueprint for economic development of all time. It sets up rules for governing a nation. But it’s unintended side-effect was to create the perfect environment for business to flourish. These rules of the nation can be applied to the governance for corporations with the same beneficial effects on business development. These rules are more than a framework supporting laissez-faire capitalism, they are rules for preventing power accumulation and evev taking power back from those individuals who seize it or accumulate it legally.
The U.S. Constitution was conceived to provide leadership for new nation. In 1787, when the U. S. Constitution was written, the United States was a federation of 13 states which bickered among themselves, threatening internal warfare to settle arguments. A national government was needed to resolve internal disputes without handing over dictatorial authority to a ruler.
All other nations at that time were run by rulers, kings and emperors. These leaders maintained armies to keep people from fighting among themselves and otherwise enforce decrees by the rulers. But the framers of the Constitution believed that laws and institutions could be put in place that could replace dictatorial kings. They believed law and order could be maintained by local law enforcement with ajudicial system and trial by peers.
At the time of the American Revolution, in 1776, the American colonies were ruled by kings who could throw people in jail, make them pay unfair taxes, or seize their land. On July 4th 1776, the Declaration of Independence was signed by 55 represenbtatives of the 13 colonies and a war was launched to win independence. The colonists were bound together by The Articles of Confederation, called a League of Friendship, which had no provision for taxation or defense, since the colonists wanted to prevent anybody or any group of people, or any institution in the country from having too much power over their lives.
But this meant the members of the League of Friendship couldn’t protect ships on the Atlantic from pirates and it couldn’t protect citizens on the Western borders from Indians or from each other. Each member state printed its own money. New York State controlled the port at New York City, and was charging Connecticut and New Jersey excessively for the use of the NYC port. To retaliate, Connecticut and New Jersey were planning a united military attack on New York. Internal militias in many states were threatening to overthrow of the local governments. In general, there was a very real potential threat of a breakdown of law and order. Everyone knew the government of the League of Friendship needed to be changed.
A convention was called in Pennsylvania to fix the shortcomings in the League of Friendship.
The framers of the Constitution knew that concentrated power is dangerous. The Constitution was to be written to insure that making laws would be hard. They expected legislators and congressmen to try to expand their powers, and expected the President to try to expand his powers, expected the courts to try to expand their jurisdiction. But by placing them in tension with each other, they thought they would block each other’s grasping too much power.
They came up with a central government with 3 separate branches – a legislature with the power to make laws, but make laws only; an executive to do what the legislature wanted; and a judiciary to interpret laws when needed. And here’s why – the 3 branches of government should keep each other in check. No one branch should become too powerfu. The President can’t go to war unless congress declares it. Congress can’t create a law unless the President signs it. A President can’t appoint a judge unless Congress confirms that nominee, and then the judge would serve for life and could nullify a law that both the President and Congress passed, if that law violated the Constitution.
They especially worried about the Presidency. The power of the Office of the Presidency might be too tempting for one person. He might try to take over and become a dictator, a king, or worse. And how should the President be elected?. Should the people vote for him directly, or should each state choose him? They decided direct voting was not the right way, but rather selection by an electoral college was superior. In the electoral college, each state gets a minumum of 2 representatives and then an additional number proportional to the population of the state (approximating the number of member of the House of Representatives) who then vote for the President.
The framers of the Constitution did not believe in democracy, nor that that every man should have the vote. They certainly didn’t believe that women should have the vote. They didn’t believe that African-Americans should have the vote. To have a vote in the 18th century, you have to have a stake in society – have property because it was their theory that you would make irresponsible decisions if you didn’t have anything to lose. They didn’t get some things right and many framers then realized that slavery was evil and should not be protected by our legal system. The Constitution was simply the best one they could get in the circumstances.The Constitution written in 1787 left slavery and state sovereignty unresolved. And 70 years later, these compromises led to the greatest crisis the United States has ever seen – the Civil War. But the framers knew the Constitution wasn't perfect, so they made it possible to change it. In fact, The Bill of Rights are the first 10 amendments, and it was ratified 2 years later, in 1789. There are now 27 Amendmernts, the most recent made in 1992. So the supreme law of the land codified in the Constitution and its Anendnments remain a living relevent blue print for economic prosperity, liberty and justice for all.